China
cuts 2016 growth target amid continued economy concerns
Premier
Li Keqiang tells opening of parliament that the nation’s economy is
likely to grow at a slower rate than previously estimated
Staff and agencies
Saturday 5 March
2016 01.46 GMT
China has cut its
growth target for this year to a range of 6.5% to 7%, down from 7%, a
further sign that the world’s second-largest economy is slowing.
Premier Li Keqiang
said in a speech at the opening of the National People’s Congress
parliament, attended by 3,000 delegates, that among the “main
development targets” for the nation was “GDP growth 6.5% to 7%”.
The goal had been
set at “about 7%” for 2015, but expansion came in at 6.9%, its
lowest for a quarter of a century.
China’s leaders
have traditionally declared the GDP goal at an easily achieved level
that was regularly exceeded, and even then the objective is usually
approximated to provide room for positive spin just in case.
Using a range,
rather than a single figure, will widen the target even further.
The downwards
revision comes after factory output contracted in China during
February.
China’s economy
has slowed steadily as the ruling Communist party tries to replace a
model based on trade and investment with self-sustaining growth
driven by domestic consumption.
China was also
targeting consumer inflation of “around 3%” and unemployment
“within 4.5%”, the text of Li’s speech said.
It did not give a
specific target for trade, which fell in 2015, only aiming for “a
steady rise in import and export volumes” and “a basic balance in
international payments”.
It also pledged
“further reductions in the release of major pollutants”.
“In setting a
projected growth rate of between 6.5% and 7% we have taken into
consideration the need to finish building a moderately prosperous
society in all respects and the need to advance structural reform,”
said the speech text, distributed to journalists at the Great Hall of
the People in Beijing.
“It will also help
guide market expectations and keep them stable.”
Li’s speech
pledged that authorities would make much-needed cuts to overcapacity
in the steel, coal, and “other industries facing difficulties”.
The country’s
leaders have sought to reassure jittery global markets in recent
weeks with a unified message that authorities still have monetary and
fiscal policy tools in their arsenal to keep the economy from further
slowdown.
The text of the
speech projected a government deficit for 2016 of 2.18 trillion yuan,
reaching a deficit-to-GDP ratio of 3%, which would be the highest
since the founding of the People’s Republic in 1949.
A budget report
given to parliament after Li’s speech showed China will raise its
defence spending by 7.6%, a smaller increase than past years as it
seeks a more efficient military.
It was the “lowest
defence budget increase in six years”, the official news agency
Xinhua said, adding it came “in the wake of rising economic
headwinds and last year’s massive drawdown of service people”.
Agence-France Presse
and the Associated Press contributed to this report
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